The Legacy Replacement Project (LRP) Fiasco - Trustees - Admin Budget for FY-2027

The NYCERS Trustees will be meeting with NYCERS staff at the end of this March to prepare the agency's FY-2027 admin budget.

Budgeting for the Legacy Replacemet Project Disaster

It is unclear how the trustees will be dealing with the LRP disaster.

Based on a statement in the FY-2024 Annual Financial Statement released in December 2024, NYCERS staff was aware of a big problem with the LRP contract with Accenture in the late spring of 2024.

There was an reduction in the Accenture appropriation for FY-2025 budget from the amount in FY-2024 ($18.7 million down from $23.2 million) but there was no mention of LRP problems in the FY-2025 budget presentation that was sent to me in response to my FOIL request.

But the financial statement is open public record and in December 2024 there is a clear reference to problems during FY-2024 with reference to reworked contract scope available in the spring of 2025.

The spring of 2025 has come and gone with no new contract scope but there is a four and half year delay in the completion date of the LRP project.

The FY-2026 budget appropriation for the Accenture contract dropped to $10.8 million with a claim of completed the "replanning" by June 30, 2025. That date failed.

the FY-2025 annual financial statement issued in December 2025 promised a new "replanning" date of April 2026 with a completion date of December 2030.

Missing Key Data

There was a key piece of information, the schedule of payments to contractors, missing from the finacial statement which I had to FOIL. When I received it, it became clear that NYCERS had paid no money to Accenture during FY-2025.

Note: the official version of the NYCERS FY-2025 financial statement on its website is still missing the schedule.

Yet NYCERS staff had budgeted $10.8 million for work to be paid to Accenture in FY-2026 without mentioning that the $18.7 million for FY-2025 had not been paid.

In conjunction with the main LRP contract. NYCERS has a large quality assurance contract to check the work of the main contractor. In addition the Board of Trustees has a contract for a risk consultant reporting to the Trustees directly for the LRP project. There should be a great deal of documentation on what is happening with the project in spite of the total lack of questions from the trustees about the status of the project.

The tables below display the amounts budgeted and paid for the Accenture LRP contract and other contracts that are part of the LRP project.

Accenture Payments

Fiscal Year	Budgeted Amount	Amouny Paid
2026	$10,776,302	open
2025	$18,728,407	$0
2024	$23,191,794	$17.9 million
2023	$23,057,826	$817,492
2022	$19,317,745	$9.8 million
2021	$825,794	$926,341
Salesforce Project
2020	$6,095,000	$3,614,398
2019	$9,350,000	$7,961,315
Fiscal Year	Budgeted Amount	Amouny Paid

The Gartner IT consultant

Gartner Payments

Fiscal Year	Budgeted Amount	Amouny Paid
2026	$2,640,000	open
2025	$1,764,000	$3,868,000
2024	$2,000,000	$2,020,000
2023	$1,800,000	$2,400,000
2022	$2,300,000	$2,400,000
2021	$1,647,285	$2,230,816
Salesforce Project
2020	$2,180,000	$805,780
2019	$2,395,000	$1,665,620
2018	$850,000	$575,000

The LRP Risk Consutant (Linea) reporting to the Board of Trustees

LRP Risk Consultant (BOT)

Fiscal Year	Budgeted Amount	Amouny Paid
2026	$700,000	open
2025	$700,000	$711,672
2024	$700,000	$602,184
2023	$700,000	$656,928
2022	$700,000	$656,928
2021	$800,000	$624,80
2020	$500,000	$0
2019	$0	$0

The LRP Quality Assurance Vendor

LRP Quality Assurance Vendor

Fiscal Year	Budgeted Amount	Amouny Paid
2026	$1,366,420	open
2025	$1,366,420	vendor not identified
2024	$1,518,244	vendor not identified
2023	$1,518,244	vendor not identified
2022	$2,000,000	vendor not identified
2021	$112,500	vendor not identified
2020	$0	$0
2019	$0	$0

The LRP - Penfax Pension Software

LRP - Penfax Pension Software

Fiscal Year	Budgeted Amount	Amouny Paid
2026	$3,991,767	open
2025	$4,194,802	not reported
2024	$3,991,767	not reported
2023	$3,585,697	not reported
2022	$3,179,628	not reported
2021	$3,059,093	not reported
2020	$0	$0
2019	$0	$0

The General Software Maintenance/Servises and the CRM (Salesforce) Sotware Mantenance Items

Software Maintenance - General and Salesforce

Fiscal Year	General Software Budgeted Amount	Salesforce Softawre Budgeted
2026	$3,879,313	$6,190,865
2025	$1,706,000	$,4,490,865
2024	$1,032,000	$3,150,000
2023	$1,000,000	$2,400,000
2022	$850,000	$2,400,000
2021	$850,000	$2,400,000
2020	$850,000	$1,914,000
2019	$590,000	$956,000
2018	$590,000	$956,000
2017	$504,000	$0

Because A Criminal Can Be in the White House – Need to Reform DOJ

The Problem

Congress created the Office of the Attorney General in 1789 and the DOJ in 1870. Both items are not embedded in the Constitution but are creatures of the Congress.

Currently Congress has no control over DOJ. The President has sole control of DOJ. DOJ must be made accountable to both parties of Congress since the President can be corrupt. As per the statutes, the President nominates the Attorney General and all other DOJ political appointments, including appointments in all DOJ component departments (i.e.: FBI, DEA, and others). They are then subject to confirmation by the Senate.

Solution

The law needs to be amended to require a two-thirds Senate approval vote for the confirmation of these positions as opposed to the current +50% level.

In addition, the confirmation must be only valid for 365 days.

The confirmation must be renewed by two thirds of the Senate every year within 60 days of the end of the 365 days.

If the confirmation is not renewed within 365 days, the appointment is immediately terminated as of the 366th day, and the office holder is ineligible for any appointed federal position for the duration of the president’s term.

The person can, however, return to his/her previous non-appointed position.

Temporary Appointments

Because the Senate has problems with confirming appointments, there needs to be a temporary appointment process.

Beginning at the start of the President’s term, all appointed positions at the DOJ (all departments and offices, i.e., FBI, Marshals, DEA, others) are considered empty and awaiting nomination and confirmation.

The two senators who are majority and minority leaders (when 50-50, majority goes to VP’s party) will make temporary appointments to all open positions picking from permanent DOJ employees.

All the positions will be listed by statute in order of authority within DOJ. For equal ranked positions they will be listed randomly by statute. New or eliminated appointed positions at DOJ are automatically either added to the end of the list or removed from the list of appointed positions at DOJ.

The majority leader will make temporary appointments for odd numbered positions, and the minority leader will make a temporary appointment for even numbered positions.

• Temporary appointments will be valid for 90 days.

• A person can refuse a temporary appointment.

• A person can only hold a temporary appointment once during the term of the President.

• Upon the confirmation of a permanent appointment, the associated temporary appointment is automatically terminated.

• Upon the end of the 90-day period of any temporary appointment because there was no permanent confirmation, the senator who made the original temporary appointment will make a new temporary appointment.

• Upon the termination of a temporary appointment the persom automatically returns to his/her previous permanent position.

• Any one person can only be appointed to one 90-day temporary appointment during the term of the sitting President.

• Any person who fails to be reconfirmed by the Senate is ineligible for a temporary appointment at the DOJ.

• A person appointed to a temporary position at DOJ during a President’s term is eligible for permanent DOJ appointments.

Conclusion

The President can terminate a confirmed appointee, but the subsequent nomination will be subject to the two-thirds approval of the Senate and the temporary appointment process.

The purpose of these reforms is to make DOJ subject to both bipartisan Senate control as well as Presidential control. This in turn protects the country from a corrupt President.

The Trustees Wake Up – NOT!

It’s nice to know that someone is reading my posts.

The NYS Open meetings Law requires that the NYCERS trustees adopt a resolution in public session appointing a person to the position of executive director.
That issue must also be on the public agenda for the meeting.

Discussions about the appointment can be held during an executive (closed door) session but the vote must be taken in open session.

At the February 12, 2026, NYCERS Regular Board meeting, the trustees admitted that they had voted to appoint Liz Reyes as the new executive director
during a closed door session of the December 17, 2025 NYCERS Investment Board meeting.

This item did not appear on the public agenda for either Board meetings.

In the open session of the February meeting, the trustees claimed that they were now giving public notice of the appointment. I guess, no harm, no foul.

The Legacy Replacement Project (LRP) Fiasco/Scandal and the Executive Director

At the same February Board meeting the LRP update was:

1. Status red
2. NYCERS and the “systems integrator” were working on the scope alignment and contract amendments
3. Future updates will be included in the Annual Comprehensive Financial Report (ACFR).

I’m not being terse. This is actually what the project manager said. As always, no questions from the trustees on penalty of excommunication.

For the record, the ACFR is published once a year in December. Talk about “talking points”.

Reyes started the LRP project in 2015 and as of today continues to control the project.

In 2021, NYCERS signed the LRP contract. It was supposed to be a five year $84 million effort.

Since the spring of 2024 the project has been in a black hole.
In the FY- 2025 ACFR there is a promise to present a new plan at the April, 2026 board meeting and
a promise to finish the project by December, 2030.

Don’t hold your breath.

I can see why the trustees may have wanted to make the appointment in a closed door session.

Did the Trustees Really Appoint a New Executive Director - There is No Public Record?

The previous NYCERS executive director retired last May (2025) and in response the NYCERS trustees appointed the current deputy executive director, Liz Reyes, as acting executive executive director.

Since then, the trustees have been persuing a hiring process.

By statute, the NYCERS Trustees are authorized to appoint the agency's executive director. That requires them to adopt an appointing resolution in public session with a recorded vote so that the public knows who the executive director is.

Based on a copy of the alleged appointing resolution, R-6 dated 12/17/2025, the trustees appointed Reyes as the new executive director with a salary of $293,038 at the Decmember 17, 2025 Investment Board Meeting.

This was the last NYCERS board meeting with the previous mayor's rep and the previous comptroller sitting on the Board of Trustees. I seriously thought that the trustees would wait for the new mayor and comptroller to be sworn in before making the appointment.

Interestingly, the resolution was electronically signed by the Mayor Adam's rep on the Board, Bryan Berge - the Chairpeson, as opposed to the standard signature of the executive director.

Also interesting, is that there was a Regular Board meeting on December 11, 2025 which would have been a more appropriate setting for the appointment resolution.

The Problem

The reason I am writing about this issue is that there is no trace of the resloution being adopted during the investment board meeting.

You can ckeck the closing video of the investment mmeting. You can hear the acting executive director make reference to the five investment resolutions that were adopted during the executive session so that there was a piblic record of the resolutions.

This was done because there is no public record of executive sessions of the NYCERS Board of Trustees and resolutions must have some public notice to be valid.

The meeting was then adjorned with no reference to a sixth resolution. That means there is no public notice of the appointment and Reyes may still be only the acting executive director.

There is, however, a stray comment after the meeting ended - "Did you need to add that item? Yeah. So.". There is no other activity after that comment. We have no idea what that item was.

Of course, the trustees can address this issue at the next Board meeting with the new Mayor's rep and the new Comptroller.

In conjuction with this appointment there is a major cloud hanging over Reyes relating to the legacy (LRP) project. The new Board members may have some questions about that project.

$634.1 Million in Investment Fees for FY-2025 - Growing Risk Level in NYCERS Investments and Runaway Fees.

Runaway Investments fees

In FY-2000 NYCERS paid $37.4 million in investment fees for an asset base of $42.8 billion.

In FY-2023 NYCERS paid $489.9 million in investment fees for an asset base of $82.4 billion.

In FY-2025 NYCERS paid $634.1 million in investment fees for an asset base of $94.3 billion.

The numbers speak for themselves. There is no benefit to these radically increased fees. Clearly, $82.4 million, ($37.4 * 2.2 = $82.4), could cover the $94.3 billion in assets for FY-2025 and produce better results. But the current trustees have no idea what was going on in 2000.

This is a big part of the income inequality in America. This story is not just about NYCERS but every public pension plan in America.

Increasing Investment Risk

In a prior post from January 2020, I outlined a new accounting reporting requirement for government pension plans (GASB 72) mandating that plans report a breakdown of the reliability of the reported value of the plan's investments. The assets are broken down into 3 levels as listed below:

• Level-1 assets - open market - very liquid
• Level-2 assets - open market - not as liquid
• Level- 3 and NAV assets - no open market - not liquid

In addition to these crazy fees noted above, the risky Level-3 assets at NYCERS have grown steadily since 2015. On top of this growth in risky assets, in 2023 there was a law passed in Albany to raise the limit (from 25% to 35%) on the amount of Level 3 and NAV assets in a NYS public pension plan.

In the table below you will see the growth for Level-3 and NAV class assets at NYCERS.

Note: As of FY-2023 NYCERS is relabeling alternative investments as net asset value items rather than Level 3 as a "practical expedient". This is a PR sleight of hand. Nobody wants to be called Level-3. "NAV" is a lot more vague. $19.8 billion (25% of the portfolio) for Level-3 and NAV assets is an obvious red flag for the risk level of the portfolio.

You have to be skeptical about the quoted $22.7 billion for NAV assets and consider a possible 50% reduction for this class.

Ranking of NYCERS Assets via GASB 72

Fiscal Year	Level-1 Assets (in thousands)	Level-2 Assets	Level-3 Assets	Assets at Net Asset Value	Total
FY-2014	$27,028,432	$17,437,139	$10,642,729	$0	$55,108,300
FY-2015	$27,707,076	$17,175,757	$10,796,968	$0	$55,679,801
FY-2016	$27,330,534	$15,924,399	$10,377,791	$1,123,861	$54,756,585
FY-2017	$32,312,375	$17,461,428	$10,914,801	$95,987	$60,784,591
FY-2018	$31,219,885	$23,282,843	$10,880,803	$66,675	$65,450,206
FY-2019	$34,128,310	$22,782,825	$11,534,369	$6,979	$68,452,483
FY-2020	$33,647,567	$24,941,479	$11,856,921	$3,735	$70,449,703
FY-2021	$42,162,979	$30,981,818	$14,845,548	$1,240	$88,091,585
FY-2022	$32,892,068	$26,386,373	$18,726,172	$1,129	$78,005,742
FY-2023	$35,986,966	$25,235,457	$461,156	$19,845,541	$81,529.120
FY-2024	$35,349,996	$30,145,235	$476,857	$21,630,394	$87,602,482
FY-2025	$39,557,691	$30,719,472	$460,754	$22,669,399	$93,407,315

Investment Expenses for the Assets by Quality for FY-2025

In FY-2025 NYCERS paid the following investment management fees for the different levels:

1. $60.5M for Level 1 assets (FY-2023 fees = $54.7M).
2. $32.9M for Level 2 assets (FY-2023 fees = $25.0M)
3. $464.8M for Level 3 and NAV assets (FY-2023 fees = $375.0M)

One domestic equity manager, Blackrock, handles $14.5 billion in assets with $259,713 in fees. Yes, less than $260,000 dollars for FY-2025.

Again, the numbers speak for themselves. The trustees are being rolled big time - everywhere.

How Taxes Crush the Poor

The federal marginal tax rates have always been biased in favor of rich people. Why the rest of us put up with this inequity, boggles the mind. Poor people need to start chopping rich people down to size

If you click on this link, chart, you will see a chart with proportional marginal tax rates. You can download it and make your own changes if you want.

I know this proposal is a pipe dream but sometimes you just have to point out the truth in spite of the odds.

The Structure of the Chart

The chart lists annual taxable earnings ranges starting with $0 to $10,000. Each range is incremented by $10,000 up to $500,000. Then the ranges are incremented by $500,000 with the last range running from $5,500,000 to $10 billion. The earnings ranges should be based adjusted gross income but for comparison purposes I am using taxable earnings.

The pattern for the change in the marginal rates is a .75% increase for every increase of $10,000 in income up to $500,000.

The first range of $0 to $10,000 has a 0% tax rate.

Above $500,000 the rate increase is 5% for every $500,000 increase in income and for the last open-ended earnings range up to $10 billion.

The Left Side of the Chart and the Right Side

If you look at the left side of the chart, you will see the proposed tax rates and the max taxes for the top of each earnings range.

If you look at the right side of the chart, you will see the current tax rates and the max taxes for the top of each earnings range.

For example, the proposed rate for the $140,000-$150,000 range is 10.5% with a max tax of $7,875 on $150,000.

The current tax rate is 24% with a max tax of $28,800 on $150,000.

After tax income on the proposed marginal tax rates would be $142,125, while on the current marginal tax rates are $121,200.

The Upper Ranges

Even with this proportional approach, this scheme gives rich people a break. There is, however, much greater fairness with this method.

You will notice that all income ranges up to the $490,000-$500,000 range generate lower taxes than the current marginal rates but all the ranges above $5000,000 (the 1%) are subject to higher taxes.

It goes without saying that the 1% will fight to death to kill these types of marginal rates. It is up to the 99% to make them pay.

The 1% benefit enormously from living in America and they should pay for that benefit.

Jan-2026: Update on the Legacy Replacement Project (LRP) Fiasco - Has the Project Been Cancelled?

NYCERS just sent me a copy of the FY-2025 Schedule of Paymemts to Consultants which appears to be a missing page from the ACFR report for FY-2025.

Significantly, Accenture was not on the list for payment.

The ommission of Accenture, who has the LRP contract, means that NYCERS did not pay Accenture anything for the entire year (July 2024 to June 2025). Accenture was paid $17.0 million in FY-2024. This, then, raises the question whether Accenture is still working on the contract, is there a dispute about the work, or is the contract dead.

As of December 2025 there is no reported resolution to the problems with the LRP project and there is still no clear description of the problems with contract and project.

As reference, this is what NYCERS said in the FY-2024 financial report (see full quotes below):

In parallel to a Phase 2.0 delivery, the Systems Integrator and NYCERS are working on a re-baseline plan for the remaining phases, which will be discussed during the February 2025 Board of Trustees Meeting.

And this what NYCERS said in the FY-2025 financial report:

NYCERS and the systems integrator are actively collaborating on a comprehensive re-baseline plan to complete the project , with an updated schedule and projrct details to be presented to the NYCERS Board of Trustees by April 2026.

It is time for the trustees to publicly state what has happened to the LRP project. Is there a DOI investigation? The new executive director has been directly responsible for the LRP project since its inception in 2016. Is there any accountability?

Seemingly in reaction to the stop payment to Accenture, NYCERS increased payment to Gartner from $2.0 million to $3.9 million for technical advice. In addition, the cost for "software, licences, and support" increased from $10.8 million to $16.0 million.

The Accenture Contract

In the Febraury, 2021, NYCERS awarded the LRP contract to Accenture at a cost of $85 million for 5 years. That is roughly an annual charge of $17 million. Work started in June 2021 and was scheduled to finish in September 2026. Best guess now for a completion date is the end of 2030.

Based on the updated ACFR data NYCERS has paid Accenture fot the LRP contract:

FY-2025	$0
FY-2024	$17.9 million
FY-2023	$817,492
FY-2022	$9.8 million
FY-2021	$926,341

Quotes from NYCERS FY-2024 and FY-2025 Financial Statements

You can see from the official comments from NYCERS concerning the LRP project that there is no mention of the fact that payemnts have been stopped to Accenture.

2024

The Legacy Replacement Project (LRP) is a complex, multi-year initiative to modernize NYCERS’ business processes and related technologies. The principal objective of the LRP is to replace NYCERS’ legacy production application with a new pension administration system. This new pension administration system will transform the way NYCERS does business and interacts with its members, retirees, employers, and other City agencies. This will be accomplished using flexible up-to-date technologies that will provide ongoing value into the future.

LRP began in June 2021, with a plan to complete the transformation over five years/five phases, with a target completion of September 2026.

Phase 1 was launched in January 2023, introducing foundational functionality that future phases will build upon.

In the midst of Phase 2 delivery, a range of legacy system changes surfaced that impacted the overall timeline. The Systems Integrator proposed to deliver a subset of Phase 2, called Phase 2.0, as this functionality did not rely on those legacy system changes, and we are currently on track for a January 2025 launch.

In parallel to a Phase 2.0 delivery, the Systems Integrator and NYCERS are working on a re-baseline plan for the remaining phases, which will be discussed during the February 2025 Board of Trustees Meeting.

2025

The Legacy Replacement Project (LRP) is NYCERS' multi-year transformation initiative to modernize NYCERS’ core business processes and replace NYCERS' existing legacy pension administration system with a secure, adaptable, and future ready technology platform. This modernization will significantly enhance how NYCERS conducts business and delivers services to members, retirees, employers, and partner City agencies.

Initiated in June 2021 as a five-phase program targeted for completion in September 2026, the project continues to advance.

Phase 1 successfully was launched in January 2023, establishing critical foundational capabilities for future phases.

During Phase 2 development, legacy system dependencies were identified that required timeline adjustments.

In response, the systems integrator and NYCERS delivered a subset of functionality referred to as Phase 2.0 in January 2025, allowing progress to continue, while collaborating on a schedule for the remaining functionality continued.

NYCERS and the systems integrator are actively collaborating on a comprehensive re-baseline plan to complete the project , with an updated schedule and projrct details to be presented to the NYCERS Board of Trustees by April 2026.